Loo & Partners’ reputation is founded on its work for the Taiwanese Civil Aeronautics Administration in its defense of a claim over a crash in 2000 brought by Singapore Airlines.

The Asia Pacific Legal 500

…That regional expertise extends to banking work, where the team, has impressive instructions… also an authority on corporate governance… advises on shipping groups and others in the sector on financial issues…

“Legal practitioners who refuse to participate in the Fourth Industrial Revolution and turn a blind eye to FinTech shall do so at their own peril!”

Asian Legal Business (ALB): FinTech is one of the financial buzzwords repeatedly used in 2016. Please briefly explain what Fintech is

Loo Choon Chiaw (LCC): FinTech is just a shorthand phrase for financial (Fin) and technology (Tech). Initially, it was a reference to the application of computer technologies to the traditional backend office functions of financial institutions. Gradually, it has been used to describe the application of new technologies, in the financial services space, to front-end consumer products by new entrants in their attempts to unseat existing and established players. The term now also denotes the disruption of the highly regulated financial services market consequential upon the replacement or enhancement or transformation of the delivery of traditional financial services by the adoption of new computer programmes, new technologies and innovations, new operating processes, or new business models.

Asian Legal Business (ALB): How did the IPO market perform in the Asia Pacific region for the first half of 2016?

Loo Choon Chiaw (LCC): While the performance of the Asia Pacific region in the first half of 2016 was not as good compared to its performance in the first half of 2015, it nevertheless appeared to have been the most active region globally and accounted for approximately 52% of the total number of IPOs. It also ranked second, in terms of the total proceeds raised, capturing 40% of the total global proceeds raised. Some of us may be surprised to learn from ‘EY Global IPO Trends 2016’ the performance of each of the regional bourses: Hong Kong Exchange (HKEx) raised US$5.6bn; Shanghai Stock Exchange (SSE) raised US$2.5bn; Shenzhen Stock Exchange (SSE) raised US$2.4bn; Tokyo Stock Exchange raised US$1.7bn; Australian Stock Exchange raised US$1.4bn; and Singapore Exchange (SGX) raised US$1.2bn.

“THE REPORTS OF THE DEATH OF THE CHINESE STOCK MARKET HAVE BEEN GREATLY EXAGGERATED”

Asian Legal Business (ALB): Would you please share with us the current state of the capital markets in the region?

Loo Choon Chiaw (LCC): We are entering into the final month of 2015 and it is certainly an opportune moment to take stock of the capital markets in the region. Despite the uncertainty and adverse sentiments from January 2015 to date, the Asia Pacific region was still the leading region in terms of both deal number and proceeds raised via IPOs for 3Q2015, with $57.8bn raised via 466 IPOs, which accounted for 52% of the IPOs worldwide, according to the latest quarterly EY Global IPO Trends: 2015 3Q. I believe that the region will continue to retain its leadership position in the global IPO market for 2015, as, to the best of my knowledge, there will not be any mega IPO in the remaining days of 2015. The top five exchanges by fund raised in the region are the Hong Kong Exchange (HKEx), Shanghai Stock Exchange, Shenzhen Stock Exchange, Stock Exchange of Thailand and Australian Stock Exchange with $19.9bn, $16,8bn, $7.2bn, $3.3bn and $3.3bn, respectively up to 3Q2015. Notably, the number and size of the proceeds raised have declined in 2015 from 2014 on a year-on-year basis.

Asian Legal Business (ALB): Broadly speaking, what are the implications of OBOR to Singapore?

Loo Choon Chiaw (LCC): One Belt One Road (“OBOR”) (or
<> in Chinese) is a tactical and comprehensive initiative conceived and proposed by China. It aims to promote connectivity and cooperation among countries primarily in Eurasia. The initiative comprises two components, namely, the land-based ‘Silk Road Economic Belt’ and the oceangoing ‘Maritime Silk Road’. Ignoring its apparent political and security objectives, OBOR has provided a gloss to the Chinese Government’s ‘reaching out’ (or
<> in Chinese) policy, which encourages Chinese enterprises to go abroad in search of resources, new markets, technologies and investment opportunities. There are obvious threats and challenges which Singapore must address by reason of OBOR. Singapore, strategically, located along the Malacca Straits, has been benefiting from the busy shipping traffic passing between the Andaman Sea and the South China Sea. With the implementation of OBOR, the location of Singapore will lose its significance and become irrelevant as maritime traffic can skip the port of Singapore. Despite the potential threat that movements of goods will forgo Singapore when they are in transit between China and Europe, I firmly believe that, ‘when God closes a door, he opens a window’. Singapore, in the long run, will stand to benefit from improved trade and capital flows as well as the opening up of new markets as OBOR gains traction. Opportunities abound if Singapore plays its cards right.

Asian Legal Business (ALB): The year is ending, how did the equity capital market in Asia Paciﬁc region perform in 2014?

Loo Choon Chiaw (LCC): According to Dealogic, the total volume of equity capital market (ECM) transactions in Asia (ex Japan) in the ἀrst three quarters of 2014 stood at USD188.5bn (it is noteworthy that 60% thereof comprised PRC ECM), which represented a 47% increase in the amount raised during the same period in 2013. Southeast Asia ECM has not performed well. It merely recorded a total amount of USD16.8bn in the ἀrst nine months this year, which represented a 32% drop from the same period last year. Similarly, the Singapore ECM did poorly. It recorded a mere USD11.7bn, representing a decrease of 31.4% from the same period last year.

Asian Legal Business (ALB): It has been 6 long years after the global financial crisis (GFC), what has the regulator in Singapore been doing in its regulation of the
banking industry?

Loo Choon Chiaw (LCC): The Monetary Authority of Singapore (MAS), the de facto central bank in Singapore, has been focusing in the last 6 years, on the singularly important task of ensuring the presence of only banks with clean bills of health and strong balance sheets in the Singapore’s banking industry. The GFC has resulted in the introduction of the Basel III’s minimum requirements on Capital Adequacy Ratios (CAR). Even though Basel III’s minimum requirement for CAR is 8%, the MAS has required the banks to maintain a CAR of 10%. Remarkably, each of the Big Three local banks, namely the DBS Bank, the United Overseas Bank, and the Overseas-Chinese Banking Corporation respectively, has maintained a CAR higher than the 10% requirement.

“THERE HAVE BEEN MUCH TALKS ABOUT THE PERCEIVED DECLINE OF CHINA AS A FDI HOT SPOT AND THE EMERGENCE OF THE CHINESE AS A GLOBAL INVESTOR”

Asian Legal Business (ALB): As a specialist practitioner, who has been advising both foreign investors investing into China and Chinese investors investing abroad, could you please share with us the issues which are much discussed currently concerning those areas?

Loo Choon Chiaw (LCC): With pleasure. In respect of in-bound investments into China, there have been much talks about the perceived decline of China as a foreign direct investment (FDI) hotspot and whether the foreign investors should look elsewhere for investment opportunities. In the opposite direction, tongues have certainly been wagging after the recent overseas acquisition spree pursued by the Chinese investors. Those who are sinophobic are, of course, fearful of the emergence of the Chinese as a global investor on security grounds. In contrast, those who are looking to divest their investments certainly view the Chinese investors favourably, and hope wishfully that one of the Chinese investors will become the predator who acquires their investments, for a high price!

Asian Legal Business (ALB): To what extent is Singapore handicapped by its size and the lack of natural resource in its economic development?

Loo Choon Chiaw (LCC): God in His wisdom has decided that Singapore, a small city state (it was once called the “little red dot” by a politician from a neighboring country, when the bilateral relationship between Singapore and that country was slightly strained), with a land area of approximately 700 square km and without a hinterland should also go without any natural resources. These are givens, which Singapore cannot run away from. As a born optimist looking at the half-filled glass of water, I always focus on the long-term opportunity available to Singapore, rather than agonising over the short-term challenge of the limit of its size or its lack of inherited wealth. Looking from a positive angle, Singapore should thank God in freeing it from the negative impact of natural wealth, be it, what the economists call the ‘Dutch Disease-dynamics’ or environmental damage associated with the exploitation and production of natural resources. From Day One, Singapore has been forced to survive from crisis to crisis, and attain its wealth creation and accumulation by the determination and sheer hard work of its Government and people working together as a team despite its inherent limitations.

Asian Legal Business (ALB): As we are already in the second month of 2013, could you share with us your views on how the capital markets will perform in 2013?

Loo Choon Chiaw (LCC): Notwithstanding that there are ten more months ahead of us, I shall nevertheless venture my views in the light of what I have seen, heard and read to date. A word of caution though, as a born optimist, I will likely err on the side of optimism.

Asian Legal Business (ALB): Would you, as a specialist practitioner in the field, please share with us the current state of the capital markets in the region?

Loo Choon Chiaw (LCC): The equity capital markets in the region, subject to the notable exception of Malaysia, have been slow this year. This could largely be attributable to market volatility resulting from the gloomy global economic outlook and the markets’ serious concerns over the continuing euro zone debacle. Malaysia has performed exceedingly well this year! Bursa Malaysia rolled out a total USD7.5 billion of new listings, including Felda Global Ventures’ USD3.3 billion IPO, IHH Healthcare’s USD2.1billion IPO and Astro Malaysia’s USD1.5 billion IPO. While the IPO markets in the region have not been roaring this year and notwithstanding the postponement of several planned major IPOs, namely, Croesus Retail Trust’s SGD800 million IPO, the IPO of Hong Kong Billionaire Li Kashing’s Horizon Hospitality (Holdings) and GE-backed Altitude Aircraft Leasing Trust’s USD750 million IPO, there is still a healthy pipeline of IPO deals waiting to tap the markets. One must not write off the IPO markets in the region.

Asian Legal Business (ALB): As a specialist practitioner in this field, could you please enlighten our readers on the current state of the Energy and Resources (E&R) industry?

Loo Choon Chiaw (LCC): Three principal factors have been responsible for the uncertainties that exist currently in the E&R sector. Firstly, there has been an absence of a global climate framework. Many industry players were disappointed with the inability of the member states to reach a consensus at the 2009 United Nations Framework Convention on Climate Change Conference, commonly known as the Copenhagen Summit, on the key issues, such as the reduction of greenhouse gas emission targets and the adoption of clean energy policies by member states.

Asian Legal Business (ALB): How did the SGX fare in terms of the listings it attracted last year?

Loo Choon Chiaw, Loo & Partners (LCC): 2010 was a harvest year for the SGX .It saw a five-fold leap in it’s IPO market capitalisation compared to 2009. An increase of SGD51 billion in comparison with SGD10.4 billion recorded in 2009.

Asian Legal Business (ALB): 2010 was a year in which many, if not most, exchanges across Asia set new records. Is 2011 also likely to be a year in which new records are set?

Loo Choon Chiaw (LCC): 2010 was indeed a good year for capital markets activities in the Asia Pacific region. All indications prior to the political unrest in the Middle East and North Africa, Japan’s earthquake and tsunami, and the damage to its Fukushima nuclear power plant, showed that China was expected to continue to lead the global IPO market in 2011 with regard to the number of new listings and the amount of capital raised.

Mergers and Acquisitions Q&A 2011: Another record year for Asian M&A? ALB discusses

ALB: As the spectre of the financial crisis is lifted from the region, M&A levels took off around Asia. What do you feel are the prospects for another record-breaking year in 2011?

Loo Choon Chiaw: The Asia Pacific region has indeed experienced strong growth in M&A activities. Bloomberg has reported that Asia Pacific eclipsed Europe in 2010 as the second most active region, following North America. Thomson Reuters predicted that global M&A activity will increase by 36% in 2011 to USD3.04 trillion as opposed to the 12% growth in 2010.

ALB: With the improvement of market sentiments, has there been an increase in M&A activities?

Loo Choon Chiaw: Global M&A activity has been at its peak since late 2009. According to Bloomberg news, global takeovers announced to date have totalled USD 1.29 trillion, approximately an increase of approximately 23% from last year.

Business continues to look strong in the coming year for Singapore’s specialist corporate finance firm

ALB: There has been much global focus on the boom in IPO activity on the HKEX and also on the Asian economies driving the global economy out of the recession. Have you noticed an increase in market conidence in Singapore?

Loo Choon Chiaw: I am not an expert on Hong Kong IPOs nor a trained economist. However, from what I have read from the inancial press, Hong Kong IPO market has indeed been doing rather well. There was a total of 69 IPOs in 2009…

The start of a new world order? Loo Choon Chiaw discusses the promise of Asian Mergers and Acquisitions in 2010 with ALB

Asian Legal Business: As we enter the new year, what do you feel are the prospects for recovery for mergers and acquisitions (“M&A”) in Asia?

Loo Choon Chiaw: There are definitely indications of economic recovery. The stock markets in the region are picking up. Emerging economies in Asia appear to have weathered the financial tsunami. The US economy also appears to be recovering…

As the world economy has been recovering over the last few months, are there any notable trends?

The world economic landscape has been drastically changed after the recent global financial crisis (“GFC”). Most experts agree that as the developed economies were the most adversely affected by the GFC, consumption from those economies will remain relatively low for quite a while. Some expect the developing economies, especially the PRC, to generate more demand in consumption.

Uncertainty would appear to be the only certainty in the ever-changing global economic and financial climate as we enter 2010. Uncertainty would appear to be the only certainty in the ever-changing global economic and financial climate as we enter 2010. Yet barring unforeseen circumstances, including a worsening of the global financial market, Singapore should be on a steady path of recovery.

ALB: Do you agree that energy and resources activity is the answer to everyone’s liquidity blues?

LCC: ‘Energy and resources’ (“E&R”) is very much like food. One has to consume food in good times or bad. By the same token, industries need to consume E&R, whether the stock market is having a bull run or when it turns bearish. One will see E&R activities come rain or shine.

ALB: It seemed like only yesterday that when we spoke of any China direct foreign investment (FDI), we were only referring to investments into China, but this trend has been reversed over the last few years, now it has been all about Chinese outbound investment.

LCC: I certainly agree with your general observations. Since the early-80s, the PRC has been the biggest beneficiary of FDIs, which have brought advanced technology…

With a prestigious clientele bursting at the seams including local and foreign governmental ministries and agencies, international banks and financial institutions and public listed companies and over 23 years of capital markets experience, A:BN finds out how Loo & Partners LLP is managing the perfect partnership with its clients.

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